China releases Australian coal trapped in storage, Reuters says

China is releasing Australian coal from bonded storage as it seeks more fuel to relieve its stressed power system, Reuters reported. 

It’s about a year since Chinese leaders unofficially banned Australian coal amid escalating tensions between the countries. Some cargoes had been unloaded from ships and placed in bonded storage, with authorities not letting the fuel pass through customs to be used in the country. 

Now that coal is being released, Reuters reported, citing unidentified sources. About 1 million tons remains in bonded storage, with some previously having been diverted to India, according to the report.

China’s General Administration of Customs didn’t answer calls seeking comment Wednesday, during the nation’s public holiday.

The release comes a week after China’s Vice Premier Han Zheng ordered the country’s energy firms to secure fuel supplies for winter at all costs. The country has been mired in a power crisis for weeks, with blackouts and cuts to factories affecting the vast majority of regions. 

A lack of coal is the biggest reason, with inventories shrinking and prices rising to record levels. Some power plants have shut for maintenance or reduced operating rates to avoid losses from the increased costs.

Last October, Chinese officials told power stations and steel mills to stop using Australian coal, and the last cargo from the country arrived in November, according to Customs data. 

The move was an escalation of long-simmering tensions between the two countries after Beijing objected to moves by Canberra it viewed as supporting the U.S. in its trade and security disputes with China. Among other things, Australia’s Prime Minister Scott Morrison called last year for independent investigators to be allowed into the Chinese city of Wuhan to probe the origins of the coronavirus.